Ask a tax advisor on the topic of Sales tax / Turnover tax

Small business rule

October 8, 2011 | 20,00 EUR | answered by Oliver Burchardt

Hello,
I had registered a business for import-export and trading with art and handicrafts from 19.10.2010 - 31.08.2011. For this, I chose the small business regulation (does it called that? Sales up to 17,500 euros/year) and waived the claim of input tax. Now I have not generated any income and have deregistered the business. However, through invoices (purchases of goods, business equipment, and booth rentals), I have paid several hundred euros in input tax and am now forfeiting them. Is there any way I can still claim and get refunded this input tax by changing the original regulation? Unfortunately, I cannot offer any further compensation as I am now receiving unemployment benefits. Best regards.

Oliver Burchardt

Dear inquirer,

Thank you for your request, which I will gladly answer as part of an initial consultation.

Please note that the tax assessment is based on the information provided. Changing, omitting, or adding information can affect the result, possibly significantly.

Even if you are a small business, you can opt for standard taxation at any time. This is still possible for past assessment periods as long as the tax assessment has not become final and binding.

For the year 2011, you will submit a VAT return at the end of the year, in which you declare both your generated sales (here zero) and the input tax paid.

If the VAT assessment for 2010 is not yet final and binding (usually it should be subject to review, as explicitly stated in the tax assessment), you can also proceed for the year 2010 by submitting a corrected VAT return.

You will then be refunded the input tax paid. Please note, however, that the refunded input tax is considered taxable income when preparing your income tax return, if you prepare a simplified profit and loss statement.

Since you have indicated that you have not generated any sales, you do not have the issue of being required to remit VAT now.

I hope I have been able to assist you in your query.

Kind regards,

Oliver Burchardt
Tax Advisor